Shares of Tanger Factory Outlet Centers surged 20% in early trading on Thursday, becoming the latest heavily shorted stock to make a rapid move higher this year, before retreating and finishing in the red for the session.
The retail stock closed down 3.3% at $17.15 per share. Earlier in the day, it rose as high as $22.40 per share and appeared to be following in the footsteps of other names with large bets against them, including GameStop and, more recently, Rocket Companies.
"It's today's Rocket," CNBC's Jim Cramer said on "Squawk on the Street" as the stock surged. The "Mad Money" host also said that he liked Tanger's management team.
Tanger is one of the most heavily shorted U.S. stocks, according to FactSet, with short interest of 33%. Stocks with high short interest have been the focus of traders on social media, primarily Reddit, in recent months.
Short selling is a strategy in which investors borrow shares of a stock at a certain price on hopes that the market value will fall below that level when it's time to pay for the borrowed shares. When stocks with large short positions start to rise, those investors are often forced to buy shares to limit their losses, pushing the stock even higher. This phenomenon is known as a short squeeze.
One popular post on Wednesday was titled "Why Tanger Outlets has the most potential for 30x tendies," using a slang term for outsized returns.
Tanger is a real estate investment trust focused on physical retail. The stock was already up 78% year to date before Thursday's spike.
Like other retail real estate landlords, Tanger has taken a hit during the pandemic. Some of its tenants have closed their stores permanently, while others have struggled to pay rent. Fewer consumers have been venturing out to shop for things like clothing and shoes, leading to traffic declines.
To be sure, most of Tanger's centers are open-air and outdoors, where many Americans feel more comfortable shopping versus an enclosed mall. During its fourth quarter of 2020, Tanger said shopper visits had returned to about 90% of prior-year levels, and climbed to 99% in January for its centers in the U.S.
Still, Tanger has vacancies at its properties that it must deal with, to keep rent checks coming in. It ended last year with an occupancy rate of roughly 92%, down from 97% at the end of 2019.
--CNBC's Lauren Thomas contributed to this report.